I. Basic information of both parties to the merger and acquisition
1. Overview of the acquirer Alibaba Group
Alibaba Group was founded at the end of 1998, with its headquarters in Hangzhou, China and overseas branches in Silicon Valley and London. Alibaba Group is a famous brand of B2B e-commerce and the largest e-commerce enterprise in China and even the world.
Alibaba was officially listed on the new york Stock Exchange on September 19, 2065438. On June 20 16, Alibaba Jack Ma put forward the concept of "new retail" for the first time in his speech, and announced the plan.
2. overview of the acquired Shanghai ladas information technology co., ltd (hungry).
Hungry is a local life platform established in 2008, mainly engaged in online take-out, new retail, instant delivery, catering supply chain and other businesses. Hungry? We have an efficient and complete logistics distribution system and a digital catering system, and are committed to using technology to build an O2O platform for local life services. Hungry? In the aspect of take-away food delivery, it promoted the digitalization of catering in China, changed people's traditional way of eating, and greatly promoted the development of catering industry and logistics industry.
Nationwide, Hungry has covered 2000 cities, with 65.438+03 million restaurants, 260 million users and more than 3 million riders. August 24, 20 17, hungry, officially announced the merger of Baidu takeaway.
Second, M&A's motivation
1, demand for new retail plan
"The combination of online and offline and logistics will generate new retail." As a B2B e-commerce enterprise, Alibaba has rich online experience, but insufficient offline experience. The offline field can be said to be a brand-new field, a blank field. It is an irrational business decision to build the whole offline system from scratch, lacking relevant experience, technology and contacts.
Hungry happens to have a perfect logistics distribution system and a mature O2O enterprise, which just meets the needs of Alibaba to develop offline business. Hungry? There are millions of full-time and part-time riders. By cooperating with Alibaba, they can make their business no longer limited to the take-away industry, but can share resources and channels with Alibaba. Through the combination of offline distribution platform and Alibaba online shopping platform such as Taobao and Alipay, the online and offline barriers have been opened.
2, need to bring synergy.
If Alibaba is hungry, it can form a synergistic effect and help to form "1+1>; 2 "effect. Through the combination of internal and external cooperation, the two enterprises can reduce operating costs and increase profits, and the acquirer can provide funds for the acquired party and promote its development.
From the same perspective, Wang Leyan, vice president of Alibaba, and the former CEO of Alibaba Health can realize the integration of technology, management and resources, and complement each other's advantages to make up for their respective shortcomings. At the same time, it also achieves synergy in brand effect, technology and corporate culture, bringing economies of scale to them and providing economic support for the development of new retail plans. On the basis of this merger, if you are hungry, you can also use Alibaba's financial support to make up for the huge subsidy loss at the beginning of the month.
3, check and balance the needs of competitors
At present, offline O2O leading enterprises are only hungry and the Meituan family. Tencent has given priority to the US Mission. If Alibaba wants to expand its offline business, then Alibaba's choice is only hungry. From Alibaba's point of view, the competitors that Alibaba needs to check and balance are Baidu and Tencent.
Hungry? The business just meets the business development strategic needs of Alibaba Ant Financial. If Alibaba is hungry after the acquisition, perhaps the word-of-mouth in Alipay and Taobao can be directly connected with Hungry in the future, so that Alibaba can re-sprint the local life service field with the help of Ant Financial.
Third, M&A risk.
1, enterprise integration risk
Generally speaking, the effect of post-merger integration plays a decisive role in the ultimate success of enterprise mergers and acquisitions. Because Alibaba and Hungry belong to the network industry, but their business is completely different. The former is an online B2B e-commerce enterprise, and the latter is an offline O2O ordering platform. If the two merge, there is bound to be the risk of enterprise integration.
The integration here is not only a unilateral resource arrangement process, but also a cultural integration process. Alibaba wants to further integrate the local life market. According to relevant news information, it is known that Alibaba's local life service company will be composed of two major businesses: Hungry and Word of Mouth.
In the future, Alibaba has a vision that local life service companies will have greater synergy with the original sectors in Alibaba's ecology. But there are two problems in the integration between the two enterprises: the first is the integration of hunger and word of mouth; The second is the integration of Hungry and Alibaba.
2. Pay the risk
Alibaba successfully achieved the acquisition of Hungry with a cash consideration of 9.5 billion US dollars, and completed the wholly-owned acquisition of Hungry. This acquisition is called the biggest cash acquisition in the history of the Internet.
Previously, Alibaba acquired Youku Tudou and Wanda Cinema for US$ 4.5 billion and US$ 4.68 billion respectively. Hualian shares disclosed the relevant details. Its valuation of hungry, the enterprise value is about 9.053 billion US dollars, which is lower than the total cash invested by Alibaba. Alibaba's acquisition is hungry. In the form of huge all-cash consideration, the consideration paid this time is more than twice as much as before.
Although Alibaba can quickly achieve the purpose of mergers and acquisitions, and the cash consideration form is different from debt financing and equity financing, it has the advantage of preventing excessive dispersion of equity and avoiding the financial leverage risk of debt to some extent. But to a certain extent, it will affect the normal operation of enterprises, because it needs to pay a lot of money quickly in a short time, so the capital chain of enterprises may also be broken. In addition, enterprises may have the adverse consequences of excessive trading.
3. Independence risk
Hunger may lose independence. Alibaba is hungry through a wholly-owned acquisition. In fact, it is also a wholly-owned shareholder. If you are hungry, you will become an absolute majority shareholder. And announced that Wang Leyan, vice president of Ali Group, became CEO of Hungry. This is in contradiction with Alibaba's principle of insisting on independent operation when it is hungry. If you are hungry, you will still maintain an independent brand and operate independently.
Hungry? Although it can get strong financial support after being acquired by Alibaba, the weakening of its independence means that it will become a pawn of Alibaba, a pawn to lay out the local life service market. Hungry and losing independence, the company's business and strategy will be subverted. Focusing on the original take-away distribution business may become an auxiliary tool for Alibaba to lay out the local life service market.
Four. conclusion
M&A behavior of Internet enterprises plays a vital role in the future development of their own enterprises. For the acquirer, it is necessary to consider the impact of the merger on the liquidity of the enterprise and whether it will have an adverse impact on the financial situation of the enterprise. Companies should make financial planning and forecasting in advance to prevent financial risks in this process in advance. The necessity and rationality of M&A should be considered in advance. It should be remembered that M&A serves the overall development goal of the company, and the purpose of M&A is to form a joint force and achieve economies of scale, rather than simply competing with competitors.
In the process of merger and acquisition, we should also consider whether the amount and form of consideration are optimal, formulate a reasonable capital structure, reduce financing risks, and ensure the liquidity and solvency of enterprises. After M&A, we should not ignore the risks of resource integration and cultural integration, and strengthen the synergistic effect to achieve economies of scale.